In 1957 an Administrative Reforms Committee (ARC) was set up for Kerala state.The head of that reforms committee was first Chief Minister.ARC Recommended clear measures for decentralisation of power at various levels and methods for democratisation of the organs of government at various levels with a view of effective participation of local self-governing institutions in the administration. The system of governance of panchayats, recommended by the ARC, was essentially a two-tier system with directly elected village panchayats at village level and district councils at the district level.The Panchayat act of 1960 recommended the division of local bodie's Department into Panchayat Department and Municipal Department for easy administration. In 1962, Panchayat department was structured under the guidance of Shri.R Kesavan Nair.

In 1957 Govt of India appointed a committee under the Chairmanship of Sri. Balwanth Rai Mehta, to study the Community Development Programme. The Committee recommended a uniform three tier system of rural local government. Panchayati Raj in India was inaugurated according to the recommendations of the Balwanth Rai Mehta Committee Report. The Panchayat Raj on the basis of 73rd amendment to the Constitution, came into force in the State on 23-4-1994. As per the provisions made in the Act, a number of powers and responsibilities, and projects of the Government were transferred to the local self-governments, with effect from October 2, 1995. Along with them, the service of the concerned officers was transferred to the local self-government bodies. Today Panchayath Directorate is one of the major departments of Local Self Government Administration. Director of Panchayat is the State level administrative officer for this department.